How This Google-Backed Startup Cracked The Code To Hyper Convenience In India

Hyper-convenience startups in India have not witnessed much success - most of them have either folded or completely changed their strategies to suit the complex market needs. But one startup managed to do what others couldn't, so much so that it caught the fancy of Google. Bengaluru-based Dunzo is the panacea for the urban Indian, who is pressed for time to run errands.

With a fleet of more than 4,500 runners and averaging a quarter of a million transactions a month, Dunzo helps complete everyday tasks such as buying medicines, groceries, picking up or dropping off laundry, purchasing cigarettes, delivering potted plants, and dropping off house keys and mobile phones to owners that may have left them behind someplace. Through a data-driven platform, Dunzo connects a runner located nearest to the user. The runner’s activity can be tracked from start to finish. Users can edit tasks through chat, and even send relevant images for specific purchases or requests. Direct online payment options through Dunzo Cash or other digital payment providers seal the deal for the user, who can finish up to 10 tasks at a time on Dunzo in a couple of hours at best.

Deliveries by motorbikes in India are hugely popular as they save time, especially in gridlocked cities like Bengaluru, New Delhi and Mumbai. Dunzo's runners on motorbikes efficiently complete multiple tasks even in peak hour traffic.

Dunzo

This convenient, daily-task management app caught the fancy of Google. Dunzo is the first Indian startup to have bagged direct funding from Google, part of the Internet behemoth's plans to diversify its interests in India's growing startup ecosystem. In addition to Google’s $12 million investment, Dunzo has been funded by Blume Ventures, Aspada Investments as well as some angel investors.

Customer First, Always

Founder Kabeer Biswas believes there are a few aspects that have helped Dunzo differentiate from competition and eventually create a niche as a leader in hyper convenience. "Dunzo can be called a self-completing to-do list. The biggest benefactor here is the customer, and we aim to provide a smooth experience for the user on the platform.” Though Dunzo raised money by 2015, it was not until the following year that they got the right product market fit. By 2017, Biswas and his team decided to scale operations significantly across Bengaluru.

Despite 2016-17 being particularly challenging for raising funds in India, Dunzo was one of the few startups that attracted big-ticket investments. Moreover, the failure of several hyper-convenience startups such as Dazo, Opinio, Eatlo and Spoonjoy made investors wary of venturing into this space.

So what made investors confident of backing Dunzo?

Karthik Reddy, managing partner at Blume Ventures, which is one of Dunzo’s primary investors recalls that his company first invested in Dunzo based on positive word-of-mouth reviews, the database of nearly 7,000 users that were hooked to the product and the team’s single-minded, user-centric approach. “Consumer internet products take a while to build product in India, but they have to remain nimble to the way users are responding. Dunzo managed to do this effectively over its course, which led us to invest in them, even in a tough market space,” says Reddy.

Biswas started off by running errands for friends through WhatsApp. By 2015, Dunzo was completing around 70 tasks a day. Now, traffic on the platform is consistent for up to 22 hours, with the highest number of requests coming in between 5 p.m. and 11 p.m. Biswas says 55% to 60% of transactions on the platform are made by women. Bangalore is its highest volume market, but Gurgaon and Pune are growing fast. Earlier, Dunzo runners would take up to 45 minutes to complete a task, but thanks to a fast and effective data-driven platform, the average running time has been brought down to seven minutes per task.

Building Product To Enhance Hyper Convenience

With a one-tap payment option on Simpl, Dunzo customers can pay their bills with ease.

Simpl

Dunzo continues to keep user convenience at its core and its strategic industry alliances are proof of the same. Fintech startup Simpl is one of the payment providers on Dunzo. Unlike other digital payment providers, Simpl allows a user to make multiple purchases with one tap, and sends a consolidated bill once in two weeks. Biswas said that nearly 35% of Dunzo's transactions are repeat purchases, so a payment option like Simpl makes it easier for customers to transact on the platform.

Nityanand Sharma, cofounder of Simpl, says, "Platforms like Dunzo, Uber, AirBnB among others are highly intelligent, with a strong user-centric business model and aim to make customers’ lives easier. Where they run into trouble is the last leg of the user experience – payments. This is what we are addressing, with the goal of making payments as intelligent and intuitive.”

Sharma says he resonated strongly with Dunzo’s core principle of enabling a smooth customer experience and decided to collaborate with them as a payment enabler to ensure the Dunzo experience is hassle-free from start to finish. “Consider Simpl as a data-driven, intelligent platform that allows merchants to keep a running tab with their regular users,” he adds.